Global Airline SizeThe 2013 global passenger airline industry is estimated to be a $539 billion industry with an additional $68 billion generated by these same firms through cargo transport9. The key measure of units for the industry is expressed as revenue passenger kilometer or RPK. This is defined as the actual kilometers flown by revenue paying passengers 10 and is estimated to be approximately 5.6 trillion for 20136. A final primary measure of the industry size is scheduled number of passengers. This is forecasted to be 3.1 billion9. These passengers are carried through more than 2000 airlines utilizing over 23,000 aircraft to complete more than 28 million flights to over 3700 locations 9. Global Airline Performance and Growth

The industry will transform this $539 billion into $22.3 billion of operating profit (3.3%) and $10.6 billion in net profit (1.6%)9. An additional measure of efficiency performance is passenger load factor or PLF. This is the measure of % of available seats used (in kilometers). The 2012 global PLF was 79.1% which is a result of a continued steady improvement in efficiency for the past five years (2008 = 75.0%)2. The industry has grown steadily in RPK at a CAGR of 4.7% over the past 20 years6 and 5.1% over the past five years9. As population, air travel per capita and globalization continues, the industry is forecasted to double in RPK over the next 15 years 6,8. Total revenue growth for the past 10 years has been steady at 7.6%, outpacing general GDP, while net profits are highly varied year over year, ranging from net losses to returns of 4.0%9. The most significant drivers to profitability are cost side elements and specifically jet fuel costs. As industry has become both more efficient in general costs and more effective at hedging variable fuel...

...Case Analysis: The USAirlineIndustry in 2009
Introduction
Throughout it’s more than 100 years of existence; the AirlineIndustry has struggled with firms’ ability to cover their costs of capital. The industry experienced many years of difficult with relatively short durations of sustained profitability (Grant, 2010).
The airlineindustry history can be broken down into two distinct eras, the regulation era, prior to 1978, and the deregulation era, post 1978. During the regulation era, with fare prices fixed, customer service and extra amenities were the main areas of achieving a competitive advantage. During this era, there were little new entries into the industry, indeed, “not a single new carrier was approved between 138 and 1978” (Grant, 2010, p. 520). After regulation, fare pricing became the focus of gaining a competitive advantage, with new entries becoming commonplace.
Defining the Problem
Although the airlineindustry, like many other industries, is faced with many issues, the overall problem is the difficulty of maintaining consistent profitability over time. This issue is industry wide, affecting most if not all firms in the industry (Grant, 2010).
Causes
Causes will be examined and outlined using Porter’s Five Forces...

...Analysis of the
AirlineIndustry
Marketing Management
Fall II
December 8, 2003
Table of Contents
Environment . .. 3
Demand . .. 6
Competition .. .. 7
Product .. .. 9
Pricing . 11
Placement/Distribution .. . 14
Promotion 16
Conclusions . 17
References ... 19
The airlineindustry is facing one of its most challenging environments in history. A global economic recession coupled with the terrorist attacks of September 11, 2001 have led to a decrease in passenger traffic, reduction in revenue per mile flown, and rising labor costs. Additionally, a collapse in pricing power and a shift in the buying behavior of business travelers, coupled with fierce competition from low cost airlines, are forcing major airlines to restructure their operations or face the prospect of going out of business. The airlineindustry has responded to this difficult environment by taking measures to reduce their costs. Airlines announced layoffs involving more than 100,000 employees immediately following the attacks. To make matters worse for the industry, the Federal Aviation Administration (FAA)...

...OVERVIEW OF THE CASE
In 2002 Delta airlines faced the unfortunate realization that the competition from low cost carriers like Southwest and JetBlue was becoming a serious problem. Even though Delta had been looking at this problem for a long period of time, the business model of Delta Airlines was organized by function and their solutions generally focused on individual aspects of the firm. For example, the marketing department provided marketing ideas, the customer service department offered customer related solutions etc. Delta realized that they did not have a comprehensive solution to dealing with the low cost carriers in the market. One of the simplest solutions proposed by Delta management was the idea that Delta could launch its own low cost subsidiary, however, looking at the rest of the airlineindustry, low cost subsidiaries seemed to be ideas that were either immediate failures or unsustainable over time. According to experts, they had “never seen a high-cost carrier transform itself into a low cost carrier”. With or without this option, Delta would have to find a solution to this problem.
The airlineindustry in the United States is immense, with more than 620 million passengers and over $81 billion in fares in 2001 alone. Unfortunately, while immense in size, in terms of profit, the airlineindustry continued to perform below the average for...

...Abstract
The airlineindustry is known to be the fastest mode of transportation throughout the United States. Consumers are constantly trying to find cheaper fares, while airliners are constantly analyzing consumer’s trends to decide how to charge fares. Airliners ultimate goal is to increase revenue. Sometimes the increase can lead to bad service and unfriendly competitive practices. The present day airlineindustry is dominated by larger air carriers. This paper will discuss why the airlineindustry has developed into an oligopoly, how price wars historically affected main carriers, why many startup carriers failed, and the advantages of price setting, variation in seat pricing and the advantages of collision of larger airlines.
History
The first successful flight occurred in 1903 with the Wright brothers in Kitty Hawk, North Carolina. This marked the beginning of the aviation industry. At first airplane travel was not popular. After the U.S. involvement in World War 1, the airline industry’s growth stagnated until 1927. When Charles Lindberg successfully completed a solo flight across the Atlantic Ocean the industry began to evolve.
A variety of air transport holding companies began to form, including American Airways, now know as American Airlines. In 1928, the Boeing Company and the United Aircraft and...

...THY has some features that makes it strong in the sector. First of all, THY charges close to a discount-airline. Secondly, it offers a business class service on both overseas and domestic flights. Moreover, THY offers a frequent flyer program (an example to this is; Miles&Smiles) Fourthly, it competes with international and domestic airlines and long distance inter-city bus services (through price cuts). Finally, THY has the best landing slots (in Istanbul & Ankara) and it is the only Turkey based international carrier.
Unfortunately, THY has some weaknesses such as; acting like a legacy airline, but does not qualifying as one . Furthermore, THY is not a name brand. Thirdly, there are no strategic partnerships (high point cost per redeemed flight) (weak frequent flyer program with high costs). Also there are lack of customer orientation and lack of service culture . Finally, its fleet size is small.
There are some opportunities like; THY sees itself as a competitive enterprise rather than a government agency . Secondly, THY has the confidence of financial markets , also, THY has a year or two before foreign discount airlines are allowed to fly to Istanbul and other Turkish markets . Finally, the expected rise in world airline passenger traffic can be an opportunity for THY.
We can sum up the threats THY faces as 3 categories; short-term threats, medium-term threats and long-term threats. To...